Reverse logistics refers to operations related to the reuse of products and materials and has been described as the process of moving goods from their typical final destination for the purpose of capturing value, or proper disposal. Remanufacturing and refurbishing activities also may be included in the definition of reverse logistics. Growing green concerns and advancement of green supply chain management concepts and practices have brought greater attention to reverse logistics. The reverse logistics process includes the management and the sale of surplus as well as returned equipment and machines from the hardware leasing business. Normally, logistics deal with events that bring the product towards the customer. In the case of reverse logistics, the resource goes at least one step back in the supply chain. For instance, goods move from the customer to the distributor or to the manufacturer.
When a manufacturer's or supplier's product normally moves through the supply chain network, it is to reach the distributor or customer. Any process or management after the sale of the product involves reverse logistics. If the product is defective, the customer would return the product. The manufacturing firm would then have to organize shipping of the defective product, testing the product, dismantling, repairing, recycling or disposing the product. The product would travel in reverse through the supply chain network in order to retain any use from the defective product. The logistics for such matters is reverse logistics.
Current reverse inventory management systems (that is inventory management systems designed to handle product returns and restocking are cumbersome and not streamlined to return inventory to the stock system in as little time as possible. Nor do current reverse inventory management systems prioritize returned items based on an order of the returned items. Additionally, current systems do not account for inspection, cleaning and maintenance of returned items. This is because most reverse inventory management systems are designed to accommodate defective products or returns, wherein the focus of the business is a final sale of the inventory or transfer of returned merchandise to a seconds or outlet distributor.
It would be desirable for a reverse inventory management system to capture and prioritize all aspects of a business focused on a reverse logistics cycle, such a product rental business.